U.S. appeals court vacates conviction of drug distributor over Botox

(Reuters) - A U.S. appeals court on Wednesday vacated the conviction of the owner of a wholesale drug distributor accused of selling authentic Botox and other drugs with foreign labels, dealing another setback to the government, which has struggled at times to successfully prosecute similar such cases.

A three-judge panel on the U.S. Court of Appeals for the Second Circuit found that a lower court erred when it declined to allow William "Liam" Scully to introduce evidence at his 2015 trial showing he sought legal advice about importing drugs with foreign labels from one of his lawyers.

"Scully’s efforts to bolster his only defense at trial with relevant evidence of the advice of a second attorney was extremely important to the defense," the opinion says.

In vacating the conviction, the judges remanded the case back to a lower court.

"I'm so happy with the court's decision to grant Liam a new trial and I look forward to him coming home," his wife, Suzanne Scully, told Reuters.

A spokesman for the U.S. attorneys office in Brooklyn, New York, which prosecuted the case, declined to comment.

Scully and his business partner ran a New York-based wholesale drug distribution company known as Medical Device King, or MDK.

Several years ago, criminal investigators at the Food and Drug Administration launched a probe into the business, as part of a broader crack down on the importation of foreign unapproved drugs.

The Botox that Scully imported and sold to doctors around the United States was authentic product manufactured by Allergan.

However, the Federal Food, Drug and Cosmetic Act makes it a crime to buy or sell a drug if it is manufactured without FDA oversight or lacks labels approved by the FDA - even if the drug is made by a legitimate manufacturer.

Scully's conviction had been one of the few big successes that the FDA's Office of Criminal Investigations had touted in its drug importation crackdown.

A special report by Reuters in 2016 found that FDA agents were having trouble getting prosecutors to take on cases involving foreign-labeled authentic Botox, and that many agents had grown frustrated and started calling themselves the “Botox Police” because they feared the cases were protecting Allergan’s bottom line, not consumers.

An earlier similar type of case in Tennessee against a doctor and his wife who were accused of imported foreign-labeled authentic cancer drugs was previously tossed out by the government while it was on appeal.